Lots of interesting stuff happening this week. Let’s dive right in.
Prepare Your Tea Leaves For Fed Jackson Hole Meeting
The Federal Reserve will have its annual symposium at that infamous hole, Jackson Hole, Wyoming, known primarily for hosting an annual Fed conference. Every word, facial expression, and awkward pause of every speaker will be analyzed on a quantum scale for any hints of future policy moves. The official topic of the conference will be the economic impact of enormous firms like Amazon.com (NASDAQ:AMZN). Based on what the market decides are the hidden messages within the speeches to be given at the conference, stocks are likely to move strongly in one way or another, provided that everyone agrees on what is being interpreted as what. Prepare your tea leaves.
PepsiCo to Soda Stream – We Can’t Beat You, So We’ll Join You
The demonization of soda, or “pop”, as some people in the Midwest like to call it, has taken strong root in the U.S., where sales of the liquid candy have been stagnating. PepsiCo (NYSE:PEP) is not taking this sitting down, so CEO Indra Nooyi has decided to buy Israeli self-soda-pop-machine maker Soda Stream (NASDAQ:SODA) for $144 a share, an 11% premium to Friday’s closing price. This is an all time high for the soda company, which back in February 2016 was trading for about $12.50, for about a 1200% gain in less than 3 years. Soda Stream was in the news back in 2014 for employing Palestinian Arabs in a West Bank factory, which Palestinian activists complained hurt Palestinian rights because the company is Israeli, even though it’s a public company and anyone who buys shares can own it. Soda Stream closed the factory in any case, laying off all Palestinian workers there, out of respect for their rights to not be employed.
Venezuela Continues Self-Immolation, Raises Taxes, Employment Costs
Venezuelan leader Nicholas Maduro decided over the weekend to hurt his starving population even more by raising value added taxes and gasoline taxes, and the minimum wage, which should help markedly worsen the already horrific employment situation in the country. The moves were in response to a long overdue admission by the Venezuelan government that its currency is worthless, so it was devalued by 95% to make way for the Sovereign Bolivar, which is the same as the Bolivar but with 5 less zeroes on it. How long it will take for the zeroes to return is the question. The value of the new Sovereign Bolivar will be pegged by a cryptocurrency called the Petro, which will be supposedly backed by oil, which Venezuela can barely pump out of the ground anymore anyway, due to collapsing infrastructure.
Will General Mills, Post, Be Next On the Roundup Chopping Block?
After Monsanto-owner Bayer’s (OTCMKTS:BAYRY) crushing defeat that cost the giant $289 million to a cancer patient who claimed the company’s weed killer Roundup is responsible for his disease, the ingredient implicated in the trial as carcinogenic, glyophosphate, has been found in a bunch of General Mills (NYSE:GM), Post (NYSE:POST), and Quaker cereals. Now this is a real can of wormy cereal. Will all consumers of Lucky Charms, Cheerios, and Quaker Oats who have cancer, sue the cereal companies for billions of dollars?
South and North Korean Families Reunited
In a bit of touching news for the soul, dozens of elderly North and South Koreans from families split apart by the Korean War in the 1950’s were reunited at the Diamond Mountain Resort in North Korea, many of whom are in their 70’s and 80’s and who haven’t seen their children or parents since the war broke out. In many cases, some siblings stayed in the North because they had jobs, while others fled to the South, and ended up facing each other in battle during the war after being drafted into the respective armies. South Korea estimates that there are about 600,000 people with immediate relatives in North Korea who remain separated. Perhaps not for much longer, if talks between the two countries continue on their current trajectory.